Euro zone investor morale heads south on American tariff worries

13:35 05.03.2018

In March, in the euro zone investor morale kept slumping, as poll disclosed on Monday. It was probably provoked by worries as for strengthening protectionism after the US President threatened to impose import tariffs on aluminum and steel.

On Thursday, Donald Trump told that his country would impose 25% duties on imported steel as well as 10% duties on aluminum with the aim of protecting American producers. By the way, the European Commission labeled the step as an outrageous intervention, which amounted to protectionism and respectively increased the prospect of counter-measures.

In March, Sentix's index for the euro zone went down to 24.0 from February’s outcome of 31.9. Such a result undershot the Reuters consensus estimate for an outcome of 31.0. Besides this, it marked the second consecutive monthly dive and it appeared to be the lowest value since April 2017.

An index tracking the euro zone’s number one economy, Germany, went down to 29.1 from the previous month’s outcome of 36.2. As a matter of fact, hopes for Germany sank from 5.5 to -2.5, thus demonstrating their lowest result since February 2016.

The German surge engine is demonstrating obvious signs of stuttering as some financial analysts pointed out. They added that Trump’s protectionist rhetoric had rather an adverse impact on traders.

On Saturday, Trump proceeded with its initiatives, threatening European car makers with an import tax if the European block dares to respond to his plan for duties on metals.

Additionally, market participants were generally disappointed by the coalition deal reached by Chancellor Angela Merkel's conservatives as well as the center-left Social Democrats. Apparently, both factors endanger Germany's economic boom.

The German authorities actually hope gross domestic product would tack on by 2.4% in 2018 from the previous year’s outcome of 2.2%.

Similar

In 2019, home prices in some smaller Chinese cities could inch down due to the fact that the world's number two economy speeds down, while the Chinese cabinet is anticipated to step in to withstand any precipitous dive…

On Tuesday, the euro tacked on because market participants waited for reports on inflation and growth in the euro zone, while the Japanese yen went down after Japan’s major bank told it would be more flexible in its huge stimulus program…

On Tuesday, the evergreen buck dived because the common currency bounced off and the UK pound managed to ascend to the day’s maximums reacting to reports that British Prime Minister Theresa May is going to take control of Brexit talks…